02/15/2013 05:19 pm ET Updated Apr 17, 2013

The Most Important, Least Sexy Use of Tax Dollars

Last week I was contacted by Bill Wilson, a reporter for the Wichita Eagle for a story on the city's infrastructure. The mayor had announced that the city needed $2.1 billion for repairs and upgrades to its water/sewer system.

The question asked: "Are Wichita's infrastructure problems unique?" No, they are not. Infrastructure investment is a national problem and for the same reasons that Wichita is facing:

Age. The good news is that many infrastructure components -- bridges, water distribution systems, storm water systems, and sanitary sewer systems -- have very long lives if well maintained. Some last 50 to 75 years. The bad news is that many systems were built at the same time when a city experienced its initial growth phase. For a number of cases, this was 50 to 75 years ago. Many systems are simply approaching the end of their life expectancy.

Deferred Maintenance. In some cases, appropriate maintenance has not occurred, resulting in accelerated or more extensive deterioration. This is especially problematic with streets and buildings (such as schools, libraries, and fire stations). Why? Mainly because maintenance is neither cheap nor sexy. Maintenance provides nothing new or wonderful for the community. It most cases, the voters and taxpayers will "see" nothing for their money. Think in terms of an individual: how excited and thrilled do you get when you have to change the oil or brakes on your car, replace a roof, or get the sewer cleaned? Preventive maintenance is one of the hardest dollars to budget in a city.

Lack of resources. While the circumstances vary, much of the first generation infrastructure was built by or funded by developers as they built commercial and residential centers. The cost was recovered in the private financing of the project. Today, most of that infrastructure is now owned by the public. Neither its maintenance nor replacement typically creates a new funding stream unless the project is part of a much larger redevelopment. This strains local budgets, especially in cities that have been hit hard by the recession and/or operate with tax caps and other revenue restrictions.

The solutions to these problems will vary by community. In most cases, though, the following will likely be required:

  • Complete and honest analysis to understand the scope and risks;
  • Strategic prioritization based on overall community impact to safety and the economy;
  • Exploration of alternative financing, including public-private partnerships and redevelopment options; and
  • In some cases, the challenging political discussion about raising taxes or fees to generate a dedicated funding stream.

The last issue, facing the reality of increased taxes or fees, can be the most challenging. As quoted in the Wichita Eagle, Alan KIng, Public Works Director, said that "the city's utility system has suffered from about 10 to 15 years of maintenance neglect, dating back to the mid-1990s, as steady rates and taxes politically trumped maintaining the system." City Manager Bob Layton explained that "There has been a tremendous amount of pressure over the years on water and sewer rates." These dynamics are hardly unique to Wichita. What distinguishes Wichita and other professionally managed cities is a willingness to openly face reality and work to get a grip on the problem.

Candid public conversations and public engagement will be key to successful action. Taxpayers need to have an understanding of the issues, options, and risks. Some may want to engage in an accusatory retrospective about what wasn't done that should have been done. A more productive conversation, however, will be future-oriented, focused on the investments needed to create and sustain a city's vision for its future... And, a recognition that sometimes you really do get what you pay for.